Published June 30, 2025 | Version v1
Journal article Open

Ownership Structure and Firm Value: A Quantitative Study of Listed Money Deposit Banks in Nigeria

  • 1. Department of Accounting, Faculty of Management Science, Plateau State University, Bokkos – Nigeria
  • 2. Financial management, College of private sector accounting, ANAN University kwall, Jos, Plateau Statae – Nigeria

Description

Abstract: This research aims at investigating how the ownership structure of directors, foreign ownership, institutional ownership, and state ownership impact the firm value of the listed deposit money banks in Nigeria. The research design is a quantitative one and ex post facto. The population consists of all the 14 commercial banks ranked on the Nigerian Exchange Group (NGX) as of 2023, and 12 banks were picked through purposive sampling method due to availability of data and consistency. The sources of secondary data included audited annual reports and financial statements between the year 2013 and 2023. The analysis of the data was performed with the help of the robust pooled Ordinary Least Squares (OLS) regression, which was justified by the diagnostic tests of multicollinearity and heteroskedasticity. The result indicates that the ownership by directors positively and statistically insignificantly affects the value of the firm whereas foreign, institutional, and state ownerships show significant negative impacts on the value of the listed deposit money banks in Nigeria. It is concluded in the study that ownership by directors in the listed deposit money banks in Nigeria has a minor role in the determination of the market valuation in that context. The foreign ownership reveals that, higher the foreign equity participation, the lower the market valuation of the listed deposit money banks in Nigeria. The state ownership also reveals that there is a relationship between government shareholding and low performance of firms in the market sense among the listed deposit money banks in Nigeria. Whereas institutional ownership demonstrates that the existence of institutional investors in these banks is associated with lower value of the listed deposit money banks in Nigeria. The policy implications of the study involve suggestions to the policymakers that they should concentrate on enhancing institutional frameworks, independence in the boardroom, and more active roles as stewardship of institutional and foreign investors. The governance and investment guidelines provided by the regulatory authorities like the Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN) and Nigerian Investment Promotion Commission (NIPC) ought to be amended so as to increase the shareholder value of the listed deposit money banks in Nigeria.

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